The Hindu Business Line : 60% leaf teas unsold at Coonoor auctions

Coonoor March 8 Nearly 60 per cent of the leaf grades offered for sale by the various brokers at the Coonoor Tea Trade Association (CTTA) auctions went unsold on Thursday.

This is the first auction to take place under VAT, after the intervention of the Nilgiris Collector and the tax authorities. Following the insistence of most of the bought-leaf factory owners to sell the teas only under VAT, the auctions did not take place a fortnight ago.

Last week, nearly 80 per cent of the offer went unsold. On Thursday, only the unsold portion of the last two weeks was offered. The sale was confined to leaf grades.

New system

According to the new system, even exporters have to purchase teas paying 4 per cent VAT, no exporter operated. "No purchase has been declared for export today, probably the first time ever," an auctioneer told Business Line. Until now, purchases for export were exempt from sales tax.

Again, the purchasers for inter-state sales coming under the CST ambit were also required to pay 4 per cent VAT. Until now, they had borne only 2 per cent CST. So, many such buyers refrained from bidding.

Some buyers purchased for inter-state trade paying 4 per cent VAT, but they were seen reducing 7 to 8 per cent in the bid price. "We have to suffer 4 per cent VAT plus 2 per cent CST when we sell these teas in other states. So, we have to adjust the bid accordingly, lest we should be out-priced in the retail end," a buyer said.

Volume unclear

In general, teas lost Rs 4 a kg over the last sale. "The buyers have reduced more than the VAT commitment," a factory owner lamented. Only 17 per cent of the leaf grades offered had been sold in the previous week. So, as much as 8.55 lakh kg should have been in the offer on Thursday.

"Since the catalogue closing is different this week, the volume is not known immediately. A clearer picture would emerge only after the dust sale tomorrow. Some factories had sold off a portion of their unsold teas in the out market. Also, some have sent their teas to Kochi auctions, where VAT is not an issue as here. So, the exact volume sold and the prices fetched would be known only later," an auctioneer explained.

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